New CROWE report predicts 1.6 percent rise in state GDP in 2018
A new report from UW-Madison’s Center for Research on the Wisconsin Economy predicts the state GDP to grow 1.6 percent in 2018.
CROWE is headed by Noah Williams, who was an advisor for Gov. Scott Walker’s presidential campaign.
The forecasted 1.6 percent GDP growth is down slightly from 2017, and is roughly equal to the average growth rate since 2010, the report says. It also predicts the labor market in the state will continue to tighten, with a gain of 40,000 jobs and unemployment dropping to historic lows below 3 percent.
Williams and Junjie Guo, co-author for the report, said “while our forecasts suggest continued growth, there is significant uncertainty and chance of slower growth in 2018. However we find relatively little risk of a substantial economic downturn either nationally or in Wisconsin.”
The report notes that while the Wisconsin economy has diversified over time, it continues to rely on manufacturing. This sector produces over 18 percent of output in the state, compared to 12 percent nationally, CROWE says.
Manufacturing in Wisconsin has seen substantial employment growth, adding over 59,000 jobs between January 2010 and November 2017 for a cumulative increase of 14 percent, the report says. But real output in the sector has stagnated, growing only 1 percent between the first quarter of 2010 and the second quarter of 2017.
The report notes that increasing employment plus flat output suggests low productivity growth, also reflected in recent declines in manufacturing wages.
“Looking forward, the biggest manufacturing issue in Wisconsin will likely be Foxconn’s planned investment,” Williams and Guo wrote. “But while Foxconn’s activity will ramp up in 2018, it will take time for its impact to be felt.”
See the report here: http://crowe.wisc.edu/an-outlook-for-the-wisconsin-economy-in-2018/
--By Alex Moe